What is its cost of common equity

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Patton Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. It’s before-tax cost of debt is 12% and its marginal tax rate is 40%. The current stock price is P0 = $31.00. The last dividend was D0 = $3.75 and it is expected to grow at a 4% constant rate. What is its cost of common equity and it’s WACC? Round your answers to two decimal places.

Reference no: EM13885482

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